For your reading pleasure...
From
dbc.com
By Thom Calandra
Updated: Tue Feb 11 14:48:44 1997
Tuesday, February 11, 1997
Cloud lifts from Sun Microsystems ...
MOUNTAIN VIEW, Calif. (DBC) -- Sun Microsystems is escaping the turmoil engulfing many U.S. technology shares. Sun
shares are selling near their one-year high at about 18 times coming earnings. That's cheap for a company that, as Merrill
Lynch analyst George D. Elling puts it, "has evolved into one of the world's leading providers of enterprise-wide network
computing solutions."
Sun shares have risen steadily since December, driven by news about the promise of network computers and the reliability of
Sun's UNIX operating system. The last time we heard from Sun CEO Scott McNealy, sometime last summer, he was
predicting Sun shares would double to about (a post-split) $50. At $34 or so, he has another 50 percent to go.
Elling in a just-released Merrill Lynch report figures Sun, thanks to its sale of Unix servers, could boost profits 15 percent a
year during the next five years. What's more, the company's Internet products, such as programming applets called Java
Beans, will propel profits by the end of this decade.
The one warning, and we believe all investors deserve a warning, comes from the threat of Microsoft's Windows NT operating
system for the corporate work place. Elling notes that when McNealy was asked about the NT threat, the CEO said his
biggest challenge was to educate the world that NT "is not the end-all." We will let time, and investors, be the judge of that. |
